HTC set to square off against Facebook with virtual headset

HTC/Chris Morris | CNBC

In the looming battle of virtual reality technology, HTC and Valve Software are preparing to square off against Facebook's Oculus Rift.

At the Mobile World Congress in Barcelona, both companies announced the Vive, a virtual reality headset that will be made available to consumers later this year.

"Vive creates an exciting opportunity for all developers and content creators, to help us bring virtual reality into the mainstream…that completely redefines how we entertain ourselves, communicate with each other, learn and, eventually, how we become more productive," said HTC chairwoman Cher Wang in a statement.

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Valve, the videogame developer and creator/operator of the industry's largest PC game digital distribution platform, announced last week that it was entering the VR space. At the time, it did not announce a partner at the time.

HTC and Huawei surprise
HTC and Huawei surprise   

Currently, the company's Steam game distribution system has more than 125 million active accounts and hosts 4,500 games, giving it an immense potential built-in audience. Many of those players are early tech adopters, and may already have a strong sense of brand loyalty to Valve.

The company differentiated Vive from Oculus's Rift, saying it offers a "full room-scale" experience that lets the user "get up, walk around and explore your virtual space, inspect objects from every angle and truly interact with your surroundings." That contrasts with Oculus, which makers say is meant to be used in a seated position.

The system will also come with wireless VR controllers to make the experience more immersive, whereas the Rift is expected to be sold solely as a headset.

While videogames will be the main initial focus of Vive, the companies say they are committed to a 'broader vision' for the device. Valve and HTC are working with several content companies, including Google, HBO and Lionsgate.

Next stop, San Francisco

Oculus CEO: VR months away
Oculus CEO: VR months away   

Next week, Valve will court game developers at the Game Developer's Conference in San Francisco, offering demos of the Vive.

Valve got its start as the developer of the acclaimed "Half-Life" games, but in recent years has been focusing more on Steam and the hardware business.

Yet the company has been experimenting with VR for some time. In 2013, engineers hacked together an idea for an augmented reality headset that Valve ultimately scuttled. It went on to become the castAR headset, which raised over $1 million on Kickstarter.

As Valve and HTC were announcing the Vive, Oculus and Samsung unveiled an expanded footprint for their Gear VR system. The Samsung Gear VR Innovator Edition will work with both the Galaxy S6 and S6 edge. Previous versions of the system required Samsung's Note 4 phone.

If Valve and HTC do in fact succeed in releasing the Vive this year, it could set up a battle among VR companies. Oculus has not given a release date for its Rift system, but many analysts expect the company to have it on the market in time for Christmas.

Sony, meanwhile, continues to work on its Project Morpheus project, a VR headset for the PlayStation. That company is expected to make further announcements on the system next week.